China's STAR: A new gold mine for veteran investors

Fear of stock market slump

Despite the new investment opportunities brought by the STAR Market, and its financial influence, some critics are worrying it might absorb some liquidity from the main board, potentially causing a stock market slump.

This worry can be easily eased with a little understanding of the scale of both China's economy and the local financial market. China's M2 was 192 trillion yuan ($27.9 trillion) at the end of June, while the first group of companies listing on the STAR Market will have received only tens of billions of yuan from investors.

For those investors who are prepared, the STAR Market will serve them as a new gold mine. It will not be a gold vault, where every block is heavy and shining. But with enough experience and hard work, experienced investors should be able to mine gold that would be worth their while, intelligence and work.

Chen Jiahe is the chief strategist at Cinda Securities.